Kaye v Norris Ward McKinnon Barristers and Solicitors

[2014] NZHC 2215

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2009-019-1473 [2014] NZHC 2215

BETWEEN

ANTHONY PRATT KAYE and MORVA

KAYE
Counterclaim Plaintiffs

AND

NORRIS WARD MCKINNON BARRISTERS AND SOLICITORS Counterclaim Defendant

Hearing:	3 September 2014
Appearances:	Mr Kaye for himself No appearance for Mrs Kaye R D Butler for Counterclaim Defendant P J Morgan QC as Amicus
Judgment:	12 September 2014

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 12 September 2014 at 2 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date: ...................................

Solicitors:           Norris Ward McKinnon, Hamilton

Counsel:            P J Morgan QC, Hamilton

R D Butler, Auckland

Copy for:           A P & M Kaye, Hamilton

KAYE v NORRIS WARD MCKINNON [2014] NZHC 2215 [12 September 2014]

[1]      By application dated 28 July 2014, the Counterclaim Defendant (“Norris

Ward”) seeks:

(a)      leave  to  file  an  amended  statement  of  defence  so  as  to  plead  an affirmative defence of accord and satisfaction (“affirmative defence”). Norris Ward allege the parties reached an accord and satisfaction on 1

May  2014,  following  face  to  face,  telephone,  text  and  email discussions  between  their  counsel  and  the  Counterclaim  Plaintiffs (“Mr and Mrs Kaye”); and

(b)an order that the affirmative  defence be determined as  a separate question.

[2]      Mr and Mrs Kaye oppose the application, although for reasons given below I

require confirmation of Mrs Kaye’s position and require this to be remedied.

[3]      Norris Ward commenced this proceeding against their former clients, Mr and Mrs Kaye, to recover a sum they alleged to be owed on account of unpaid fees. Mr and  Mrs  Kaye  counterclaimed  for  damages,  alleging  that  Norris  Ward  had breached their obligations to the Kayes.  Norris Ward have denied any such breach. Norris Ward discontinued their proceedings in 2012, leaving Mr and Mrs Kaye’s counterclaim on foot.

[4]      I commenced hearing the proceeding on 28 April 2014.  Mr and Mrs Kaye were not represented.  They closed their case on 30 April 2014.  On Thursday, 1 May

2014 I adjourned the trial to the following Tuesday, 6 May 2014.   At that stage, Norris Ward had at least two witnesses to call, being a witness of fact travelling from England and an expert.  Mr and Mrs Kaye had not called expert evidence but I had left open to them an opportunity to do so.

[5]      On 2 May the Court was informed the matter had settled, and shortly after that the parties asked to see me.   Counsel for Norris Ward and Mr Kaye (but not Mrs Kaye) appeared, the former seeking an adjournment on the basis of the alleged accord and satisfaction.  Mr Kaye disputed that any settlement had been reached.  I

granted the adjournment, on the basis that it appeared agreement had been reached but left open the possibility that Mr Kaye might contest the issue.  Since then Norris Ward and Mr Kaye have remained at an impasse as to whether a binding agreement was reached, hence Norris Ward’s application.   On 27 August 2014 I appointed Mr Morgan QC as an amicus.

Leave to amend

[6]      Norris Ward seek leave to amend pursuant to High Court Rules, r 1.9, alternatively r 7.7.

[7]      For present purposes, I am not required to determine whether the parties reached a binding settlement on 1 May 2014, but only whether Norris Ward should have leave to amend their defence so as to put that issue before the Court.   I am satisfied that they should.  The discussions between the parties occurred during the trial and the defence, if proved, will be determinative.  There can be no prejudice to Mr and Mrs Kaye as both were involved in the discussions and both are available to give evidence.   I grant leave, pursuant to High Court Rules, r 1.9, which is the

correct provision in the present circumstances.1

Separate question

[8]      Norris Ward seek an order that the affirmative defence be determined as a separate question in the proceeding, pursuant to r 10.15.  On balance, Mr Morgan considered there was merit in making such an order, for reasons similar to those advanced by Norris Ward.

[9]      The objective of the High Court Rules is to secure the just, speedy and inexpensive  determination  of  a  proceeding.2    The  general  expectation  is  that objective is most likely to be achieved by determining all matters in issue between

parties in a single trial.   The task of persuading the Court otherwise is difficult.3

1      See Easton v Larsen [2013] NZHC 2859 at [11] and Elders Pastoral Ltd v Pemberton (1990) 2

PRNZ 188 (HC).

2      High Court Rules, r 1.2.

3      Clear Communications Ltd v Telecom Corporation of New Zealand (1998) 12 PRNZ 333.

Counsel for Norris Ward referred me to the criteria the Court generally applies in considering whether to order that an issue be determined separately.4

[10]     In  particular,  Norris Ward  submits  that  the  affirmative  defence  could  be determined promptly.  The relevant witnesses are in New Zealand and any hearing would be of short duration.  Also, the entire proceeding would be at an end if Norris Ward were to succeed on the affirmative defence.  That would avoid a resumption of the  hearing  on  the  merits.    If,  however,  the  Court  were  to  determine  that  no settlement had been reached, the trial on the merits could continue.

[11]     Mr Kaye wishes  the hearing on the merits to  be resumed as  quickly as possible and submits that such hearing would be brief in any event.  As Mr Morgan submitted, however, it is for Norris Ward to present their case on the merits as they see fit.   I accept that a hearing of the affirmative defence would be of shorter duration than a resumed trial addressing that defence and the merits.

[12]    Secondly, Norris Ward proposed that another judge could determine the affirmative defence, leaving me to hear the balance of the trial on the merits if necessary.  This submission was based on the view I expressed when considering the application for adjournment on 2 May 2014.

[13]     I do  not  consider it  necessary that  another judge determine the issue  of whether  the  parties  reached  an  accord  and  satisfaction.    A judge  is  frequently required to express a preliminary view on an issue, such as the admissibility of evidence, before considering the issue in light of evidence and submissions.  I have already commenced hearing Mr and Mrs Kaye’s counterclaim and the defence Norris Ward has advanced to date.  In Bevan-Smith v Reed Publishing (NZ) Ltd,5 the Court was required to consider several defences, including accord and satisfaction.   The Court held there had been accord and satisfaction but also went on to determine the

issues on the merits, in case it were wrong.

4      McGechan on Procedure (online looseleaf ed, Brookers) at [HR 10.15.06].

5      Bevan-Smith v Reed Publishing (NZ) Ltd HC Auckland CIV-2003-404-3628, 10 January 2007.

[14]     Thirdly, the discussions on 1 May 2014 on which Norris Ward rely were conducted by their counsel, Mr Latton and Ms Robertson.    Both have now sworn affidavits.  Norris Ward will be required to instruct new counsel if they pursue their case on accord and satisfaction.   Norris Ward submit that, if I were to order the determination of a separate question, it may be that new counsel has to be briefed only on that particular issue.   I accept that might be so but the need to brief new counsel is a consequence of the manner in which the parties conducted the discussions.  It is not a matter to which I attach much weight in making this decision.

[15]     Other matters which I take into account are as follows.

[16]     First,  the  relevant  authorities  warn  that  the  savings  in  time  and  cost, anticipated when the determination of a separate question is ordered, often do not eventuate in fact.  That may be because the matter proves to be more complicated than originally thought and/or because of appeals or for other reasons.  In this case there is a dispute between the parties as to what happened and when, and some of the discussions were with Mr Kaye and some with Mrs Kaye.  I am not satisfied that the question would be resolved speedily, with minimal evidence or legal submission.

[17]     Secondly, I am not satisfied that Norris Ward need incur all the costs they anticipate if all defences are heard together.  For instance, Norris Ward might apply to have the witness who is overseas give evidence by video link.

[18]     Thirdly, this case is already part heard.  I accept Mr Kaye’s submission that it should be completed as quickly as possible.   Whilst Norris Ward should have the leave to amend that they seek,  I am not satisfied that the proposed  affirmative defence should be determined as a separate question.

Directions

[19]     Norris Ward are to file and serve their amended statement of defence to counterclaim no later than 4 pm, 17 September 2014.

[20]     I draw Mr and Mrs Kaye’s attention to High Court Rules, r 5.62.  They are required to file and serve a reply to Norris Ward’s proposed affirmative defence within 10 working days of service of the amended statement of defence.6

[21]     Mrs  Kaye  was  not  in  Court  on  2  May 2014.    Nor  was  she  present  on

3 September 2014.  Mrs Kaye is to advise the Court whether she wishes to continue as a Counterclaim Plaintiff and, if so, whether she wishes to take an active role in the proceeding.  This is to be done by memorandum to be filed (and served on Norris Ward and Mr Morgan QC) no later than 4 pm, 19 September 2014.  Mr Kaye may appear for himself but may not represent Mrs Kaye.

[22]     By application dated 25 June 2014, Mr and Mrs Kaye applied to amend their counterclaim.     Mr  Kaye  abandoned  that  application  during  the  hearing  on

3 September 2014.   I shall delay treating the application as abandoned until I am

informed as to Mrs Kaye’s position.

[23]     Further directions as to the resumed hearing will follow the filing and service of the amended defence and the memorandum to which I have referred.  I should be grateful if Mr Morgan QC would remain involved at present.

[24]     Costs are to lie where they fall, as Norris Ward have succeeded in part only.

..................................................................

M Peters J

6      High Court Rules, r 5.62